Mr M E Taggart v FPSG Connect Ltd (In Liquidation): 8002214/2025
EMPLOYMENT TRIBUNALS (SCOTLAND)
Case No 8002214/2025
Between
Mr Michael Edward TaggartClaimantFPSG Connect Limited (In Liquidation)Respondent
Before
Employment Judge C McManusMr G Walker for claimantTrainee Solicitor for claimantDate 16 February 2026
JUDGMENT
[1]The claimant’s complaint of unfair dismissal is well founded and is successful.[2]The claimant is entitled to the total sum of £22,935.79 (TWENTY TWO THOUSAND, NINE HUNDRED AND THIRTY FIVE POUNDS AND SEVENTY NINE FIVE PENCE) in respect of the unfair dismissal complaint, comprising an unfair dismissal basic award of £9,706.50 (NINE THOUSAND, SEVEN HUNDRED AND SIX POUNDS AND FIFTY PENCE) and a compensatory award of £13,229.29 (THIRTEEN THOUSAND TWO HUNDRED AND TWENTY NINE POUNDS AND TWENTY NINE PENCE).[3]The claimant’s breach of contract claim in respect of unpaid notice is well founded and is successful and the claimant is awarded the net sum of £9,301.95 (NINE THOUSAND, THREE HUNDRED AND ONE POUNDS AND NINETY FIVE PENCE in respect of that complaint.
REASONS
[1]The ET1 submitted by the claimant’s representative on his behalf brought complaints against FPSG Connect Limited of unfair dismissal and breach of contract in respect of non-payment of notice pay. Notice of the claim was served on FPSG Connect Limited by the Tribunal on 16 September 2025. That was sent to the address set out for the respondent in the ET1 form and the ACAS ECC: 3rd Floor, Queens House, 29 St Vincent Place, Glasgow, G1 2DT. No response was received. On 23 October 2025 correspondence was issued by the Tribunal to parties informing that the claim would proceed undefended to a Final Hearing. Case Management Orders were issued. On 31 October 2025 a Notice of Hearing was issued to parties, with video (‘CVP’) joining details for this Final Hearing (‘FH’).[2]FPSG Connect Limited entered voluntary liquidation in November 2025. Robb Advisory were appointed as liquidators. Correspondence was sent from the Tribunal to the appointed liquidators on 14 January 2026 notifying them of this FH and stating: “This notice is sent to the respondent for information only. The respondent is entitled to attend the hearing (by providing a contact telephone number) but will only be able to participate to the extent permitted by the Employment Judge who hears the case. A copy of the Tribunal’s decision will be sent to the respondent.”[3]On 23 January 2026 the claimant’s representative provided to the Tribunal an email from Stuart Robb, Managing Director of Robb Advisory (the appointed liquidators) stating: “..we have no objections to the action going ahead and will not be lodging defences as Liquidator.” Proceedings[4]The FH proceeded undefended, with no appearance for or on behalf of the respondent. The claimant was represented by Mr James and relied on documents in a Bundle in pages consecutively numbered 1 – 54. The numbers in brackets in this decision refer to the page number in that Bundle. Evidence was heard on affirmation from the claimant only. Issues for the Tribunal’s determination[5]I required to determine the following issues: - Was the claimant’s dismissal an unfair dismissal in terms of section 98 Employment Rights Act 1996 (‘ERA’)? - If so, what remedy is the claimant entitled to? - Is the claimant entitled to sums in respect of unpaid notice period? - If so, what sum? Findings in fact[6]The following findings in fact were made on the evidence presented at the Final Hearing (‘FH’):[7]FPSG Connect Limited carried out professional recruitment services. The Claimant was employed by FPSG Connect Limited in Sales and Recruitment, specialising in the IT sector. The claimant entered into a contract of employment with FPSG Connect Limited on 30 April 2014 (38 – 52). His employment commenced on 1 May 2014. On 25 October 2019 John Agnew (CEO) wrote to the claimant confirming the claimant’s promotion to Director – IT Recruitment Solutions and salary increase to £60,000, effective from 1 October 2019 (53). That letter also stated: “Due to your promotion, your new notice period will be 3 months, all other terms and conditions remain the same, please refer to your contract of employment.”[8]After July 2025, the claimant worked mainly from home, sometimes in the business’ offices in Edinburgh and Glasgow. The claimant understood that the business was moving into new premises in Edinburgh.[9]On 6 August 2025 John Agnew phoned the claimant and asked the claimant to meet him the following day to speak about something urgent. The claimant would normally speak to John Agnew on a daily basis but had no prior indication of any issue affecting him. The claimant asked John Agnew to tell him the news then. John Agnew told the claimant that it was ‘not great news’. He told the claimant that the business was ‘technically insolvent’ and didn’t have money to pay the claimant. That was a shock for the claimant. The claimant asked what that meant for him. John Agnew told the claimant that he would be paid until the end of August only. The claimant asked about his 3 month notice entitlement. John Agnew said “It doesn’t matter. We’ve no way of paying you beyond the end of the month.”[10]The claimant sent an email to John Agnew on 7 August 2025 (2). He stated: “John, I am still reeling from our conversation yesterday…… If this is the direction the company intends going down, can you please confirm as soon as possible that I will be: - Paid to the end of this month - Paid my outstanding holiday entitlement , and - Paid in lieu of my 3 months’ notice period in accordance with my contract.”[11]John Agnew replied by email to the claimant on 7 August 2025 (3) stating: “Fully appreciate the conversation yesterday was not what you would like to have heard. As discussed yesterday, the company is not in a position to pay notice beyond the end of this month due to lack of income which to be fair you have been directly responsible for considering you have had no permanent billings since April. We will pay your salary up till the end of this month with holiday entitlement on top. As no notice is required you are free to find another job without any restrictions. If the company pulls around its financial position, I will naturally see what I can do regarding your notice but that is looking unlikely.”[12]The claimant did not receive any communication from FPSG Connect Ltd informing him of the reason for his dismissal. The claimant had no prior indication of any issue with his work. No disciplinary proceedings or capability proceedings were initiated against the claimant prior to his dismissal. There was no consultation with the claimant in respect of any redundancy situation. There was no consultation with the claimant in respect of any transfer of the business. The claimant’s last day at work was 6 August 2025. From that date he was not required to carry out any work for or on behalf of FPSG Connect Ltd.[13]The claimant’s net pay from the respondent in the months of May, June and July 2025 is shown in the payslips (30 - 32) as £3573.45 in each month. The last day the claimant worked for the respondent was 6 August 2025. That was the effective date of termination of his employment. The last payment the claimant received from the respondent was on 31 August 2025. That was part payment in lieu of his 3 month notice period. The claimant is entitled to payment in lieu of the balance of his contractual notice period.[14]The respondent’s business entered voluntary liquidation in November 2025. In the period between 7 August 2025 and January 2026 the respondent business has continued to carry out some work of the kind previously carried out by the claimant. Adverts have been placed for recruitment opportunities. The on line adverts at 33 and 35 were placed in the period between 7 August and November 2025. The on line advert at 36 was placed in January 2026. That advert is headed ‘FPSG Specialist Recruitment’ and includes a box headed ‘See recent hiring trends for FPSG’.[15]As the claimant had not received any written communication from FPSG Connect Ltd in respect of his dismissal, he sent an email to John Agnew on 26 September 2025 (4). That stated:- “…I have still to receive a formal letter of termination, with reason for it. I also have not been issued with a P45. As my employer, please confirm ASAP when these will be issued.”[16]The claimant did not receive a reply to that email. From 7 August 2025 the claimant sought to obtain income from alternative sources. He communicated with contacts, prepared and shared his CV and made job applications (8 – 16). In order to pursue an income opportunity, the claimant created Dunmore Business Limited (17 – 24). The claimant is the sole Director of that business, which was incorporated on 2 December 2025 (17 - 24). The claimant has invoiced for work done by him via Dunmore Business Limited in December 2025 and January 2026 (25 – 26). The gross amount invoiced is £4,080.00. The claimant’s net income from those earnings was £3,304.80.[17]The claimant received Universal Credit payments in December 2025, being an emergency advance payment of £1,440.48 (which requires to be repaid within 24 months) and a further payment of £2,001.95. Relevant Law Unfair dismissal
Relevant Law
[18]The law relating to unfair dismissal is set out in the Employment Rights Act 1996 (‘the ERA’), in particular Section 98 with regard to the fairness of the dismissal and Sections 118 – 122 with regard to compensation in terms of Section 98(1) for the purposes of determining whether the dismissal is fair or unfair it is for the employer to show –(a) the reason (or if more than one, the principal reason) for the dismissal, and(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. Section 98(2) sets out that a reason falls within this category if it – (a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do, (b) relates to the conduct of the employee,[(ba) is retirement of the employee](c) is that the employee was redundant,(d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.[19]Section 98(4) of the ERA sets out that where the employer has fulfilled the requirements of subsection 98(1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and(b) shall be determined in accordance with equity and the substantial merits of the case. This determination includes a consideration of the procedure carried out prior to the dismissal and an assessment as to whether or not that procedure was fair. Notice pay[20]The rights in respect of a minimum period of notice of termination of employment are set out at Part IX of the ERA and are for one week’s notice pay for each complete year of employment. In terms of section 86 of the ERA, an employee is entitled to not less than one week’s notice if his period of continuous employment is less than two years. Redundancy[21]The definition of redundancy is set out in the ERA s139(1), as: “For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to —(a) the fact that his employer has ceased or intends to cease — (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or(b) the fact that the requirements of that business — (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.’
Compensation
[22]The basic award is calculated as set out in the ERA Section 119, with reference to the employee’s number of complete years of service with the employer, the gross weekly wage and the appropriate amount with reference to the employee’s age. Section 227 sets out the maximum amount of a week’s pay to be used in this calculation.[23]In terms of the ERA Section 123(1) the compensatory award is such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. In terms of Section 123(6) where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.[24]Awards for future loss of earnings consequent on dismissal are taxable under S.401 of the Income Tax (Earnings and Pensions) Act 2003 in so far as they exceed £30,000. When this happens, the standard practice is for tribunals to ‘gross up ’ the award. Following Hardie Grant London Ltd v Aspden 2012 ICR D6, EAT, where a tribunal is contemplating making a compensatory award in excess of the £30,000 tax-free figure, the grossing up of the figure to allow for the incidence of tax should take place before applying the statutory cap imposed by section124 ERA.[25]With regard to dismissals after 6 April 2009, section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 (‘TULRA’) (as amended by the Employment Act 2008) makes provisions for the adjustment of awards because of failure to comply with a relevant Code of Practice. Section 207A states:(1) This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule A2.(2) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a) the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b) the employer has failed to comply with that Code in relation to that matter, and (c) that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%.(3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that— (a) the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b) the employee has failed to comply with that Code in relation to that matter, and (c) that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the employee by no more than 25%.(4) In subsections (2) and (3), “relevant Code of Practice” means a Code of Practice issued under this Chapter which relates exclusively or primarily to procedure for the resolution of disputes.(5) Where an award falls to be adjusted under this section and under section 38 of the Employment Act 2002, the adjustment under this section shall be made before the adjustment under that section.[26]The list of proceedings (‘jurisdictions’) to which section 207A(2) and (3) applies is set out in Schedule A2 TULR(C)A — S.207A(1). The list includes s111 ERA (unfair dismissal) and section 163 ERA (redundancy payments) and The Employment Tribunal Extension of Jurisdiction (Scotland) Order 1994 (SI 1994/1624) (breach of employment contract and termination). The relevant Code for unfair dismissal purposes is the revised ACAS Code of Practice on Disciplinary and Grievance Procedures. Under section 124A ERA, for the purposes of unfair dismissal compensation, any adjustment made in accordance with S.207A only applies to the compensatory award. Submissions[27]The submissions and schedule of loss presented by the claimant’s representative at the FH were confused and confusing. I suggested that he consult his supervisor and the Remedies Handbook and directed that a revised Schedule of Loss be presented within 7 days. A further two versions of a Schedule of Loss were then presented, with accompanying explanatory notes. For the reasons set out below I did not accept all what was submitted by the claimant’s representative.[28]The claimant was employed by the respondent under a contract of employment from 1 May 2014 until 7 August 2025. The email from John Agnew of 7 August 2025 (2) shows that the claimant was dismissed within the meaning of section 95(1)(a) ERA. The respondent has not shown the reason for the dismissal, as required in terms of section 98(1) ERA.[29]The claim is undefended. Neither the claimant nor the claimant’s representative put forward what they believed was the reason for the claimant’s dismissal. In those circumstances I did not accept that the authorities relied upon by the claimant’s representative in his written submissions were relevant. The only contemporaneous documentary evidence before me on the reason for the dismissal was John Agnew’s emailed reply to the claimant of 7 April 2025. That could refer to more than one potentially fair reason for dismissal in terms of section 98(1) and (2) ERA. The respondent did not provide the claimant with the reason for his dismissal and has not defended this claim. If the reason for dismissal was redundancy, the claimant may be entitled to a redundancy payment from the Redundancy Payment Fund. Neither the claimant nor the respondent has relied upon redundancy as the reason for the claimant’s dismissal. I accepted the claimant’s evidence that there was no prior issue raised with him re his conduct or capability. I accepted that there was no prior indication to him that a redundancy situation was likely to affect his position.[30]I took into account that the respondent had carried out some work of the type previously carried out by the claimant, after the termination of the claimant’s employment. I did not accept the claimant’s representative’s submission that the later liquidation of the respondent’s business was ‘irrelevant’. I took into account the claimant’s evidence on the adverts at 33 – 36. When asked by the claimant’s representative if the respondent had continued to operate after being in liquidation, the claimant’s evidence was “to the naked eye it looks a lot like that.” I took into account that the advert placed in January 2026 could have been done by a company within the same group as the respondent business or to whom the respondent business transferred under the TUPE Regulations. I make no determination on that.[31]In all these circumstances, I could not identify the reason for the dismissal. The claimant’s dismissal was an unfair dismissal in terms of section 98(1) and (2). The respondent did not show that the reason for the claimant’s dismissal was a potentially fair reason in terms of section 98(1) and (2).[32]Further, and in any event, the claimant’s dismissal was unfair on application of section 98(4) ERA. I took into account Lord Justice Griffiths’ guidance in Gilham and ors v Kent County Council (No.2) 1985 ICR 233, CA: ‘The hurdle over which the employer has to jump at this stage of an inquiry into an unfair dismissal complaint is designed to deter employers from dismissing employees for some trivial or unworthy reason. If he does so, the dismissal is deemed unfair without the need to look further into its merits. But if on the face of it the reason could justify the dismissal, then it passes as a substantial reason, and the inquiry moves on to [section 98(4) ERA], and the question of reasonableness.’[33]On the facts found, in the circumstances, including no prior indication of any issues affecting his continuing employment having been given to the claimant and no consultation or procedure followed before the claimant was informed of his dismissal, the respondent did not act reasonably. The claimant’s dismissal was an unfair dismissal, determined in accordance with equity and the substantial merits of the case. The claimant is entitled to an unfair dismissal basic award and compensatory award.[34]As at the effective date of termination of employment (6 August 2025) the claimant was aged 46 and had 11 complete years’ continuous service. His gross weekly pay was £1,153.85. The applicable weekly wage cap is £719. The claimant is entitled to a basic award of (13.5 x £719.00) £9706.50.[35]The claimant has suffered financial loss arising from his unfair dismissal. That financial loss was from 31 August 2025. In circumstances where there was evidence of the type of work which had been carried out by the claimant on behalf of the respondent being continued after entering voluntary liquidation, whether by transferring business to a group company or otherwise, I considered that it was appropriate to determine the contributory award to the claimant, taking into account losses post November 2025. On the evidence before me, the compensatory award made is just and equitable in terms of section 123 ERA.[36]The compensatory award has been calculated to compensate the claimant for loss of earnings arising from his unfair dismissal. To avoid double recovery, as the claimant is entitled to 3 months’ notice pay, the compensatory award is calculated in respect of losses in the period after the expiry of that 3 month notice period i.e. from 7 November 2025. The period from 7 November 2025 until the FH on 23 January 2026 is 11.14 weeks. The claimant’s weekly net pay with the respondent was (£3,573.45 x 12 /52) £824.64. Using that figure for weekly net pay, and on the basis of the claimant’s representative’s position that pension loss should be calculated simply, on a figure of £25.40 per week, The claimant’s earnings in that period would have been ((£824.64 + £25.40) x 11.14) £9,469.45. The claimant’s net earnings in the period from 7 November 2025 to 23 January 2026 were £3,304.80. The claimant’s past loss of earnings (in the period from 7 November 2025 until 23 January 2026 was (£9,469.45- £3,304.80) £6,164.65.[37]I considered whether it was appropriate for future wage loss to be awarded. In circumstances where there was evidence of the type of work which had been carried out by the claimant on behalf of the respondent being continued, whether by transferring business to a group company or otherwise, I considered that it was appropriate to determine the contributory award to the claimant, taking into account future losses. I accepted the claimant’s representative’s submission based on the claimant’s future weekly wage of £240. I considered it to be just and equitable to calculate his future wage loss in respect of a future loss period of 26 weeks, that calculates to (£240 x 26) £6,240.[38]I awarded the claimant the sum equivalent to a week’s pay in compensation for loss of statutory right to claim unfair dismissal. That is the sum of £824.64.[39]An uplift may be awarded to reflect failure to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures. In the circumstances of this case, where the reason for the dismissal was not identified as a reason to which the ACAS Code of Practice on Disciplinary and Grievance Procedures would apply, no uplift is applied to the unfair dismissal compensatory award. Had the reason for the dismissal been the claimant’s conduct or capability, in circumstances where there was no procedure followed prior to his dismissal, an uplift of 25% would have been applied.[40]In respect of the breach of contract claim re non-payment of notice pay, the claimant is entitled to payment in lieu of the balance of his notice period. His employment terminated without notice on 6 August 2025. He received payment for the period to 31 August 2025. I accepted the claimant’s representative’s submission that the claimant is entitled to payment in respect of the balance of his contractual 3 months’ notice period, and that that balance is 9.4 weeks (the period from 6 August to 31 August being 3.57 weeks). I did not accept the claimant’s representative’s calculation of the sum due being based on the claimant’s gross payments. On the claimant’s net weekly pay of £824.64, the balance of notice pay due is (9.4 x £824.64) £7,751.62. On application of section 207A TULRA and Schedule A I applied an uplift to that figure of 20%. That reflected that the claimant was dismissed without notice on 6 August 20225 but did receive payment in lieu of notice until 31 August 2025. That 20% uplift (£1,550.33) increases the breach of contract award to (£7,751.62 + £1,550.33) £9,301.95.[41]The claimant is entitled to the following: - Unfair dismissal basic award of £9,706.50 - Compensatory award of (£6,164.65 + £6,240 + £824.64) £13,229.29. - Breach of Contract award of ((£7,751+ £1,550.33) £9,301.95.[42]The claimant is entitled to a total award of £32,237.74. The compensatory award does not exceed £30,000. There is then no need to gross up the loss to compensate for any tax payable on sums in excess of £30,000.[43]No claim was made for an award under section 92 ERA arising from failure to issue a written statement of reasons for dismissal. That would have entitled the claimant to an award equivalent to two weeks’ pay (uncapped). Recoupment Regulations[44]The claimant was in receipt of Universal Credit for part of the period in respect of which the compensatory award relates. To avoid double payment, the relevant government department may seek to recover the amount of benefit which the claimant received during this period. This will be recovered from the respondent before the relevant part of the award is paid to the claimant. The prescribed element of this award, to which the Recoupment Regulations apply relates to the period from 31 August 2025 until 23 January 2026. The prescribed element in respect of this period is the claimant’s past wage loss (£6,164.65). The prescribed element is £6,164.65. The monetary award exceeds the prescribed element by (£32,237.74 - £6,164.65) £26,073.09. The prescribed element of £6,164.65 should not be paid to the claimant by the respondent until the relevant government department serves a recoupment notice on the respondent advising of the amount of benefit paid to the employee, or notification is given that there will be no recoupment. On service of a recoupment notice, the specified amount will then fall to be paid by the respondent to the relevant government department. Any balance falls to be paid by the respondent to the claimant once the respondent has received this recoupment notice or notice that there will be no recoupment, a copy of which will be sent to the claimant.